Useful Links

nun · 12-09-2011, 12:58 PM

This article says that if you own the real estate through a trust it's reportable on FATCA, but if you own the property it isn't.....I'm still uncertain about mortgages though.

The Foreign Account Tax Compliance Act

theOAP · 12-09-2011, 02:13 PM

I remember struggling with this when I first read the instructions.

From Form 8938, General Instructions, Page 1:
Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U.S. person.

Is your home an investment? Is a mortgage a contract?

From Page 3:
Specified Foreign Financial Assets
c. Any financial instrument or contract that has an issuer or counterparty that is other than a U.S. person.

These are the only references I could find in the instructions that would relate to a foreign mortgage.

It would be hard to argue that rental property is not held for investment, so that's an easy one. Is the primary purpose of a home for habitation, not investment (well, after 2009 anyway). I concluded that a mortgage was a contract though, and the issuer would not be a US Person.

Since I do not have a mortgage, I stopped. So the simple answer is - I don't know! You can try, but I doubt you'll get a straight answer from Guya.

nun · 12-09-2011, 04:05 PM

Quote:

Originally Posted by theOAP

Since I do not have a mortgage, I stopped. So the simple answer is - I don't know! You can try, but I doubt you'll get a straight answer from Guya.

That's an in joke.......but a funny one

You've come to the same conclusions as me. Mortgage maybe FATCA I don't really know.....so if I buy a home in the UK I won't have a mortgage, just use proceeds of my US home sale to buy the UK one outright.

I seem to remember certain Govt things like social security being excluded form FATCA, but what about insurance contracts. If I move to the UK I'll need car and home owners insurance. Again I remember reading that insurance without an investment component is excluded from FATCA which is good, but foreign life insurance would count

**sengsational** · 02-12-2012, 02:46 PM

Quote:

Originally Posted by theOAP

Is your home an investment? Is a mortgage a contract?

Not sure how I found this "Leif Simon" Lief Simon | The Experts, character, but from the introductory stuff, he seems to be saying if you hold foreign real estate in your own name, then it's not reportable. Unfortunately, I can't show you the actual link to the text because it's behind a login. But he says this:

Quote:

Here is some good news:

You know that, as an American, wherever in the world you go, Uncle Sam
requires you to report on your worldwide income and assets. But there are a
couple of investments that the government doesn't require you to report on.
No questions asked. They're simply not interested.

The first is foreign real estate.

Yes, you can own a second home (whether
for investment or personal use) in a foreign
country and you are not obliged to inform
the U.S. tax authorities that you own it (if
you own it in your own name).

And, while new laws may make it easier for
the government to get at your bank account
overseas, it's a heck of a lot harder for
someone (assuming they can track it down
in the first place) to physically remove your
foreign property.

Here's a link to the whole intro thing: take_the_emergency_exit.pdf

Ed_The_Gypsy · 02-12-2012, 09:27 PM

Quote:

If the situation were reversed and I lived in the UK and am also a US citizen, I would still have to file a US tax return, although there is a tax treaty in place between the countries to avoid double taxation.

If I remember correctly, double taxation is reduced, not eliminated. When working in Canada, I paid Canadian taxes first, then still paid some US tax. Beware.

theOAP · 02-13-2012, 04:55 AM

Quote:

Originally Posted by sengsational

Not sure how I found this "Leif Simon" Lief Simon | The Experts, character, but from the introductory stuff, he seems to be saying if you hold foreign real estate in your own name, then it's not reportable.

It appears you can own a vacation home in Monaco, fill the grounds with buried gold bars, and still not have to report any of it on Form 8938.

The reporting question arises as to any income you may have if you decide to rent the home out during the tax year. I've yet to find a definitive answer. The question also remains regarding a mortgage if it's held by a 'Foreign Person', or the issue of joint ownership with a 'Foreign Person'.

Here's a less investment orientated explanation for 8938 (and the only indepth article I've found currently):

http://www.aca.ch/fatcabna.pdf

nun · 02-13-2012, 08:41 AM

Excellent bedtime reading

**MichaelB** · 02-13-2012, 08:50 AM

Quote:

Originally Posted by sengsational

Not sure how I found this "Leif Simon" Lief Simon | The Experts, character, but from the introductory stuff, he seems to be saying if you hold foreign real estate in your own name, then it's not reportable. Unfortunately, I can't show you the actual link to the text because it's behind a login.

This does not look like a site that gives reliable advice on US tax and reporting compliance. The FATCA compliance rules are just now being released, so anything published even a few weeks ago is probably based on speculation.

theOAP · 02-13-2012, 09:47 AM

Quote:

Originally Posted by MichaelB

This does not look like a site that gives reliable advice on US tax and reporting compliance. The FATCA compliance rules are just now being released, so anything published even a few weeks ago is probably based on speculation.

I'll certainly agree with that. This is one year it may pay to file as late as possible if you think FATCA applies to you in any way.

**MichaelB** · 02-13-2012, 10:25 AM

Quote:

Originally Posted by theOAP

I'll certainly agree with that. This is one year it may pay to file as late as possible if you think FATCA applies to you in any way.

Not a bad idea. Overseas taxpayers automatically qualify for a 60 day extension and can request another through Oct 15.

nun · 02-13-2012, 02:32 PM

Quote:

Originally Posted by MichaelB

Not a bad idea. Overseas taxpayers automatically qualify for a 60 day extension and can request another through Oct 15.

FATCA is going to be more of a shock for US residents than for expats who are well used to the arcane nature of international taxation. With the FATCA limit for US residents being $50k there's going to be a lot of head scratching when people get down to 2012 taxes.

youbet · 02-14-2012, 09:55 AM

Quote:

Originally Posted by Alan

I am a UK citizen living in the USA, and have UK income, but I don't have to pay UK taxes on anything, and don't have to file a UK tax return. I do have to pay US taxes on the UK income.

That seems reasonable and fair.